Miami's economic upswing continues a decade after the city declared a state of ''financial emergency'' and was forced to endure the indignity of operating under a governor-appointed oversight board.

Moody's Investors Service announced today it has improved the credit rating of Miami's General Obligation Tax Bonds, the latest in a string of upgrades in recent years. As recently as 2000, Miami's ratings were at junk status.

The new rating from Moody's is A2, up a notch from the previous rating of A3. The change means Miami can issue bonds at a lower interest rate, which translates to tax dollar savings on future bond issues. It also means Wall Street remains bullish on the city's future.

Since 1996, Moody's stated in a written opinion, "the city has made notable strides. Officials have erased a $68 million accumulated deficit, structurally balanced the budget, and built reserves.''

Moody's credited a city financial integrity ordinance adopted in 2000 with institutionalizing sound financial practices. It also praised initiatives begun more recently under Miami Mayor Manny Diaz -- such as the Miami 21 citywide rezoning effort, which Moody's says is ''proactive'' and
"will provide long-term benefits.''

In 2000, Moody's was the first major credit agency to elevate Miami to investment-grade status. Other agencies followed suit, and the city's credit rating has steadily been on the rise.

''I'm ecstatic,'' City Manager Pete Hernandez said today of the latest upgrade.
"The city has come a long way in the last four or five years, no question.''

Miami still faces challenges ahead, however, something Moody's takes note of in its opinion. Miami's tax base has nearly doubled in the past four years -- now topping $34 billion -- yet the city has made a habit of dipping into reserve funds to balance its books.

By fall of next year, Hernandez has predicted, city reserves will have dropped to $95 million -- down from $142 million in 2003, but still healthy for a city of Miami's size.

A major hurdle facing city leaders is negotiating a deal with employee unions that will address soaring pension costs.

''Costly union contracts are a major stumbling block to resolve,'' Moody's warns.